5 Common Mistakes while filling

Here are the five common mistakes in Schedule BP (Business Profit) committed by online filer of return identified by CPC, Bangalore responsible for erroneous processing of return

1 Profit before tax to be entered

For Sl no 1, it is very much recommended to put in the value of Profit Before Tax (PBT) rather than Profit After Tax (PAT), in order to allow the calculations to occur correctly. In case there are multiple businesses and some do not have books then enter the sum of PBT (Sl 43) and Net profit (Sl 51d) of P&L Account.

Depreciation allowable under Income Tax Act, 1961, u/s 32(1) (ii) must be as per Sch DEP. When Schedule Profit and Loss is filled with a claim for depreciation but depreciation amount is either not added back at item A11 in Schedule BP or details of depreciation in plant and machineryand other assets are not filled by the assessee in Schedule DPM, DOA and Schedule DEP, this may lead to disallowance of depreciation.

3 Deemed Income Under sections 44AD, 44AE, 44AF

Where P&L account is filled and includes Deemed income u/s 44AD, 44AE 44AF etc, ensure that relevant figures in A4 and A33 in Sch BP are correctly filled to avoid incorrect income figures.

SCENARIO 1:If P&L is not filled at all, then A1 will be blank. In such a case A4 should be left blank and Depreciation in A11 and A12 can be left blank (as also Schedules DPM, DOA, DEP etc). Only the relevant values in item A33 should be entered.

SCENARIO 2:If P&L account is filled as under regular books and Depreciation is entered in Sl 42 of P&L Account, then A1 should be entered from Sl 43 of P& L Account and therefore, will be non zero. In such a case, A4 should be entered and should match the total value in A33 (xii). Depreciation in A11 and A12 should NOT be left blank and also Schedules DPM, DOA, DEP should be entered etc.

SCENARIO 3:If P&L account is filled as under ‘No Accounts Case’ and Depreciation in Sl 42 of P&L is left blank, then, A1 should be entered from Sl 51d of P& L Account and therefore, will be non zero. In such a case, A4 should be entered and should match the total value in A33 (xii). However, Depreciation in A11 and A12 can be left blank (as also Schedules DPM, DOA, DEP etc). The relevant values in item A33 should be entered.

Total of Deemed Income (IF NON ZERO) under Sections 44AD , 44AE, 44AF, 44B, 44BB, 44BBA, 44BBB, 44D, 44DA, Chapter XII-G and First Sch of IT Act as per Sl no 33 of Sch BP) should not be hence lower than Sl no 4 of Sch BP.

4 Depreciation in case of deemed income

In the case of Deemed Income greater than 0, and if Depreciation debited to P&L is non zero, then ensure that Depreciation allowable under IT Act is non zero to ensure correct calculation.

5 Value of Net profit to be entered in A37

In case nature of business does not include Tea/Coffee/Rubber, the net profit or loss from business or profession after applying Rule 7A,7B, 7C in A37 should be entered as the same value as arrived in Sl no 36 of Sch BP.

Net Profit or loss from business or profession after applying rule 7A, 7B or 7C should not be left blank or 0, if the Net profit or loss from business or profession other than speculative business is non zero.

ONLY where the nature of business is Tea/Coffee/Rubber can A37 be lesser than A36. In all other cases, during processing the value of A37 will be taken as same as A36.